UPDATE 1-California PUC approves Sempra's Sunrise Powerlink

(Adds detail, SDG&E comment, possible legal action)

LOS ANGELES, Dec 18 (Reuters) - Sempra Energy's SRE.N proposed $2 billion Sunrise Powerlink transmission project received approval on Thursday from the California Public Utilities Commission.

The 123-mile-long, 1,000-megawatt powerline is to open in 2012.

The controversial line -- fought by environmentalists and ratepayer groups -- split the five-member commission as two commissioners made separate proposals.

In the end, commission President Michael Peevey’s proposal received a 4-1 “yes” vote from the board. Dissenting was Commissioner Dian Grueneich, who offered a proposal that differed from the one passed by the board, mainly in that it would have enforced a requirement that the line carry a large amount of renewable power.

Peevey and other commissioners said during a commission session held in San Francisco that they were confident Sempra’s investor-owned utility, San Diego Gas & Electric Co, would keep oral promises to transit renewable power on the Sunrise Powerlink and that renewables account for a third of the power it delivers by 2020.

Sempra Chief Executive Officer Debra L. Reed said the approval will foster growth of renewable energy.

“Reliable transmission infrastructure is critically needed to reinforce the region’s electric system and to open up new avenues for delivering green energy to our customers.”

The Sunrise Powerlink is to run from the Imperial Valley to San Diego County.

The Imperial Valley east of San Diego has potential for geothermal and solar power development.

CPUC members said they had considered but rejected the advice of an administrative law judge who said the Sunrise Powerlink should be rejected as not needed for California to meet renewable power goals of 20 percent of total power generated by 2010.

Gov. Arnold Schwarzenegger supports increasing that requirement for renewable power to 33 percent by 2020, and the California legislature is expected to consider that issue in 2009.

SDG&E says the Sunrise Powerlink will supply enough electricity for about 650,000 households, and that it will provide another transmission line to a region that sorely needs it.

Opponents to Sunrise Powerlink have said they would challenge any CPUC approval in court as not being economically viable or needed to supply the area with renewable energy as well as not being based on solid science.

Ratepayers of California’s investor-owned utilities will pick up the tab for building Sunrise Powerlink and Sempra is allowed a 11.5-percent rate of return for running it.

The biggest investor-owned utilities in the state are Pacific Gas & Electric Co, a unit of PG&E Corp PCG.N and Southern California Edison, a unit of Edison International EIX.N. (Reporting by Bernie Woodall; Editing by Christian Wiessner)